Change In Leadership For NASH Coming

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Regulatory themes will shape the lead in NASH.

Clinical trials with the Right endpoint are more important than the trial Phase when determining the leader.

Galectin-3 is implicated in the progression of NASH disease.

Rat pictures of fibrosis closely follow the human trial results.

Wall Street has not done its homework on Galectins and the number of diseases they are implicated in.

There are a long list of companies competing in the NASH space but the question is who is the most likely to reach the finish line first? The top 3 contenders are Intercept Pharmaceuticals (NASDAQ:ICPT), Allergan (NYSE:AGN) through their purchase of Tobira, and Genfit (OTCPK:GNFTF). Each of the top 3 have had issues in their Phase II data with their trial design and endpoints.

My research has uncovered 26 companies in Phase I or higher with different targets and mechanisms of actions. In doing a thorough analysis there are some second tier companies that could leap to the head of the pack in as little as 10 months. So this article is going to focus on the top 5 drugs with FAST TRACK designation as well as a few honorable mentions so investors can position ahead of the regulatory announcements. The lingo in NASH can be confusing so we will start with background, education, regulatory themes, targets, and end in competitive analysis.

NASH Overview

There are many theories on what causes NASH. The main culprits are obesity, diabetes, lack of exercise but this is a condition that takes many years to progress and in some cases as much as 20 years. Diet and exercise are the first line defenses in mild NASH where it is at a stage where the body can reverse it. The liver has a great propensity to regenerate itself so finding a drug for the early stages of NASH where only fibrosis is apparent and there are no symptoms is going to be a very difficult sale to the FDA. An investor needs to consider the FDA's perspective that the focus of drug therapies needs to be on late stage NASH, specifically Stage 3 & 4 where reversal of the disease is not possible.

Let us break down the components of NASH by looking at the NAFLD activity score and its components and examine how NASH is graded. NASH is a severe form of non-alcoholic fatty liver disease (NAFLD) and occurs in conjunction with obesity and type 2 diabetes. If you look at the slide below, Type 1 and Type 2 NAFL are reversible without medicine so any drug candidates treating this stage of NASH are in for an uphill battle for approval because healthcare providers would be unwilling to pay for treating a disease that has no symptoms and doesn't lead to any increase in mortality.

The NAFLD Activity Score (NAS) uses a scaling system to measure the amount of NASH disease. It's an eight point scale and the higher the number means the more severe the disease is. The NAS was developed to measure changes in NAFLD during a clinical trial. The three elements of NASH are steatosis, inflammation, and hepatocellular ballooning. All livers contain some fat but when more than 5% of the liver weight is fat then it is diagnosed as a Fatty Liver. Fibrosis is also measured using a scaling index from 0 - 4. The 4 score means Cirrhosis. These terms are going to come in to play later on in the article.

Source: World Gastroenterology Organization

NASH is turning out to be a problem in the USA and around the world and is called the silent epidemic because people are afflicted with the disease and don't know it because there are no symptoms. Certain population subgroups are more susceptible to NASH. Ethnicity does play a role. A study of ethnicity between latino and non-latino whites showed latinos were more prone to develop NASH. As obesity and diabetes continue to climb, the number of patients with NASH is likely to increase. Insulin resistance is a major risk factor with NASH. As you can see in the chart below type 2 diabetics are at the highest risk of NASH.

Source: Intercept Pharma Slides

Regulatory Environment

The FDA has designated NASH as a disease with an unmet medical need. NASH has been studied for years and FDA guidance has evolved as advances in the understanding and progression of the disease have come to light. ICPT was one of the first companies to achieve indications of efficacy when they showed a 2 point reduction in the NAS. The FDA rewarded ICPT with Breakthrough Therapy designation but tightened their stance on what would be required for registration. Studies have shown that Stage 1 and 2 NASH can be reversed with diet and exercise so simply reversing fibrosis in an early stage where the patient is still asymptomatic will not likely work for the FDA. Safety is one of the top priorities at the FDA and when ICPT had safety issues the FDA made a point to renegotiate the trial and got ICPT to use a lower dosage in their Phase 3 trial. Due to the publication NASH and Endpoints in Clinical trials released in December 2016 the FDA seems to have changed its stance on what it regards as viable endpoints for approval. Liver biopsies have showed inconsistency in sampling of the disease and reversing fibrosis in a late stage needs to accompany a change in Hepatic Venous Pressure Gradient (HVPG). Increases in portal pressure are linked to increased mortality. Decreases in portal pressure of less than 10 mm Hg are linked to increases in longevity and overall survival. Safety is a constantly recurring theme at the FDA. The FDA will not approve a drug for a reduction in fibrosis alone if the drug doesn't have a good safety profile.

This chart above highlights the key endpoints that are likely to lead to drug approval. NASH Resolution and NAS are unlikely to lead to a registration because if you look closely at the column labeled surrogate markers you find the notes regarding them as an unreliable endpoint. Any drug with endpoints other than a reduction in cirrhosis, regression of fibrosis, or a reduction in HPVG is unlikely to be a serious candidate for registration. If you want to increase longevity there are really only two primary endpoints HVPG and advanced fibrosis. In the chart below you will see the caveat regarding the regression of fibrosis. Fibrosis regression needs to happen in stage 3 and 4 patients.

Source: Hepatology Vol 61, Issue 5, 23 Mar 2015

Fast Track designation from the FDA for NASH

Table: Late-Stage NASH Pipeline




US Trial Phase




HVPG Levels
Fibrosis Regression/Biopsy


FT; phase 2 trial PIVOTAL results expected in late 2017

Obeticholic acid


NASH Resolution w/Hepatocyte Ballooning
Score=0 or
Fibrosis Improvement no worsening of NASH


Currently approved for primary biliary cholangitis; earned Breakthrough Designation for NASH with liver fibrosis



Improve 1 Stage Fibrosis in F2/F3

w/o impact on Steatohepatitis


FT; phase 3 trials expected to begin in 2H 2017 readout 2019

Elafibranor (GFT-505)


NASH Resolution w/o worsening Fibrosis
Improve Fibrosis 1 Stage


FT; phase 3 trial underway in Europe



HVPG Levels
Fibrosis Regression/Biopsy


FT; phase 2/3 trial expected to begin in early 2017

Key Target Receptors


Drug/ (Ticker)


Drug/ (Ticker)

FXR Agonist


FXR Agonist


PPAR α/δ Agonist

GT505 /



cCK18 Pan-Caspase

Emricasan / (NASDAQ:CNAT)



This illustration and chart will give an overview of how the drug companies are trying to attack the disease. The two concepts are by protecting the liver from further injury and then by reducing the injury. On the chart the FXR Agonist serves to protect the liver and reduce inflammation. The key pathways of the FXR is fibrosis, lipid (fat) metabolism, glucose metabolism, inflammation, atherosclerosis, and bile production. As you can see with this FXR target a lot is happening and that is good but one of those pathways is atheroscleroris and for those without a medical degree that is the hardening of the arteries. With ICPT's drug OCA production of eNOS is increased and that leads to vasodilation or widening of the blood vessels. So with the good comes the bad of pruritus and higher LDL levels which will be addressed later in the article. The only other company using this FXR target is Enanta Pharmaceuticals (NASDAQ:ENTA) but they are in a Phase 2a trial. Genfit is not alone is targeting the PPAR α/δ receptor. Octeta, a private company and Inventiva, a French public company are in Phase II trials with their drug candidates. Like ICPT, Galectin Therapeutics actually protects the liver and reduces inflammation. The Medscape slide could stand to be revised under liver protection. The reason for this revision is that rat studies show that knockout galectin-3 mice cannot get fibrosis there is a protective effect by blocking the galectin-3. Additionally in rat studies GR-MD-02 actually protected the liver and reversed fibrosis. Below you will see amazing pictures of the rat livers that were given toxins and the drug at the same time and still reversed fibrosis.

Other Novel Targets

As I indicated earlier the stages NASH can be broken down into FAT, INFLAMMATION, and BALLOONING. The ideal drug is going to attack all 3 pillars of NASH and fibrosis, but these other drugs might be able to be used in combination further down the road. Bristol Meyers (NYSE:BMY) and its drug BMS-986036 uniquely targets the Pegylated-fibroblast growth factor-21 (PEG-FGF21). The target is a metabolic regulator of glucose. The idea is to increase the oxidation of fatty acids thereby reducing the fat component of NASH. Next is Galmed (NASDAQ:GLMD) with its fatty acid conjugate. Viking Pharmaceuticals (NASDAQ:VKTX) has a TR Beta receptor that works by lowering LDL-C counts influencing the fat levels. MediciNova (NASDAQ:MNOV) has a similar idea but it is trying to increase triglyceride levels and accomplish cholesterol efflux from the liver which transports them out of the liver to be metabolized. Regulus (NASDAQ:RGLS) has an miR-103/107 inhibitor that is tied to insulin sensitivity and hoping to reduce the fat content in the liver. Novo-Nordisk (NYSE:NVO) has a GLP-1 analog that aims at decreasing appetite. Shire (NASDAQ:SHPG) has an ADBT inhibitor hoping to control liver enzyme levels. Madrigal (NASDAQ:MDGL) and its drug MGL-3196 are using a THR-beta agonist to lower HDL and LDL Cholesterol. The common theme with these other novel targets is to reduce the fat in the liver that creates the environment for fibrosis to progress. The issue with all these approaches is that they will be unable to achieve registration by themselves. Gilead (NASDAQ:GILD) or Cempra (NASDAQ:CEMP) wasn't mentioned because they stopped their trials for NASH.

Themes from Mouse Studies

The billion dollar question is how good are these mouse studies at predicting an FDA approval. When going through the FDA registration process most drugs fail because of toxicity. In fact 90% of drugs fail human trials even though mice and humans are 90% identical. That means that mice only have a 10% predictive power when concerned with safety. So getting through a phase 1 safety trial is a big hurdle but putting safety aside mice studies do in fact work and translate to human trials so we should really look at them and not dismiss their predictive nature. Past articles about NASH have focused so much on the clinical trials and the little nuances in biomarkers that they miss what is right under their noses. The old saying a picture is worth a thousand words rings true when you look at these mouse studies. This slide is going to illustrate the layman's method of comparing the effectiveness of the drugs since no head to head comparison is available. The red staining in the slides below represents collagen and that is basically fibrosis. The ideal result is seeing a big change from red bands to no red bands and a break in the bridging between them. The drug companies don't really focus on preclinical studies so bear with the disparity in the resolution of the pictures. When you look at the set of pictures below the goal is to find the biggest before and after change. The pictures are rank ordered to help illustrate the point. In the before pictures you start with healthy mice and barrage them with toxins over 8 weeks to simulate 20 years of liver damage then take the picture. The next step is to administer the drug and measure the effect over 2- 8 weeks depending on the study. There is one big caveat in this slide in that the first picture the toxins weren't stopped it was continued for an additional 4 weeks while the drug was administered. Again it's time to put this into layman's terms. The toxin, thioacetamide, is likely equivalent to 20 years of hard drinking. So add another 10 years of hard drinking while you are administering the drug and see if this works. When given that background which slide looks the best now? The mouse studies show a clear front runner.

Source: Author Compilation

Role of Galectins in NASH and other Diseases

The causes of NASH are well documented, but the question is what is the best way to treat NASH. The two best methods were to protect the liver and reduce the inflammation and resulting fibrosis. Drugs that do both are great candidates but do any of the drugs fix the underlying disease? GR-MD-02 is a galectin blocker that targets the galectin-3 receptor which could be responsible for doing 3 things. Strong evidence suggests that by blocking the galectin-3 you can restore the body's immune system to normal function. This is the first way to treat the disease by making sure the macrophages in the liver called Kupffer cells don't polarize into inflammatory cells that kill healthy cells and stimulate the hepatic stellate cells that eventually form the collagen bands in the liver. The next thing that a galectin blocker could do is bind to CD-36 class b scavenger receptors. This could prevent the Kupffer cells from using this receptor to engulf low-density lipoprotein (LDL) and then turn into a foam cells which triggers the inflammatory response to wall off the macrophages. Galectin-3 is also overexpressed in areas of fat-laden and ballooning hepatocytes. By blocking the expression the macrophages don't seem to target the cells. The final way a galectin blocker works is by reducing the expression of inducible nitric oxide synthase (iNOS) which is an inflammatory marker for the T-helper cell 1 (Th1). If the inflammatory response is not triggered then the T-helper cell won't produce macrophages which set off the cycle of activating the hepatic stellate cells. The real takeaway of this section should be that blocking a galectin is a good thing but the bigger picture is that by blocking most galectins specifically the galectin-3 you are targeting the source of almost ALL chronic disease ranging from cancer, psoriasis, diabetes, and most organ fibrosis.

Source: ResearchGate

NASH isn't the only form of liver disease that galectin inhibition could work on. Galectin-3 is upregulated hepatitis B or C, autoimmune, copper or iron overload, primary biliary cirrhosis, or alcohol-induced liver disease. Knockout galectin-3 mice cannot get fibrosis when dosed with toxins. Studies have been done to track the galectin-3 expression before and after injuring the liver only to reveal that the galectin-3 expression increases markedly during insult and then returns to normal expression when allowed to heal. In a normal liver galectin-3 is negligible but galetin-3 is increased dramatically in the nodules of fibrotic tissue. Look at the brown staining in the slide below. This study titled Galectin-3 regulates myofibroblast activation and hepatic fibrosis strongly suggests that fibrosis is regulated by the galectin-3. This study is 12 years old and one of maybe 20 papers written on galectins that year. The purpose in bringing to light such an old study is to illustrate how poorly this field of study has been reported on. Last year 600 papers were written on galectins. The key to NASH, organ fibrosis, immune-oncology is the galectin-3. The question is how long are investors going to ignore what is right under their noses in picture form?

Source: PNAS

Drug Candidates

Intercept Pharmaceuticals

ICPT does have an advantage because in May 2016 Ocaliva was approved for primary biliary cirrhosis (PBC). What's interesting to note is that the FDA approved this on the surrogate endpoints which at the time was considered a reasonably likely "predictor" of a clinical outcome. Only after further study will we even know if it works. The biggest cloud hanging over ICPT is the safety profile of the drug. In addition to the 3 SAE's, in the FLINT study we learned that there were elevated LDL (bad cholesterol) levels in the drug arm of the trial and about 23% of the patients suffered from pruritus (itchy skin). In the Phase 2 study the dosage was as high at 40 mg but after evaluating the side effects the Phase 3 protocol has been significantly lowered to placebo, 10 mg and 25mg of OCA. The trial will enroll 750 patients and span 72 weeks.

Even though ICPT's recent negotiations with the FDA trimmed the trial size, the REGENERATE trial design has some high hurdles to cross. They are using 2 arms. In their past study 10 mg showed no statistical relevance over the control group so that puts all the pressure on the 25 mg arm to prove the case. If they duplicate trial results this trial won't likely have the statistical relevance for registration.

With all the controversy surrounding the FLINT trial there is a real risk that safety might be a factor in this trial as well. In the DSP-1747 Japanese trial 10% of patients in the 40 mg arm had to drop out due to severe pruritus and 50% experienced pruritus related events. They are using a new protocol to lower the dosage so they can reduce the incidence of adverse events yet still show enough clinical activity for approval. The trial is smaller than planned and their inclusion criteria includes stage 2 fibrosis patients. When the trial results hit the FDA might only focus on the Stage 3 patients and dismiss Stage 2 patient population because it doesn't translate into a mortality benefit. The company was not specific in identifying how large the interim cohort was, but they hope to complete enrollment of by mid-2017. Since the length of the trial is 18 months, the best case for a data release is the end of 2018. The size of the new trial is 750 patients, but given the reduction in the size of the study and talk of just finishing enrollment of the interim cohort by mid-2017 you have to wonder if there are underlying problems with recruitment due to the safety profile.


Last year Allergan acquired Tobira in a deal valued at $1.7 billion to add Cenicriviroc (CVC) to build a pipeline in NASH. Their phase 2B (CENTAUR) trial is still active and they are in the process of evaluating 289 patients with advanced liver fibrosis Stage 2 and Stage 3. CVC failed to meet its primary endpoint of a 2 point reduction in NAS in the first readout of a 2 year trial. Based on the efforts of the ex Tobira team the FDA revised two endpoints that need to be met for consideration of registration. CVC needs to show at least a one stage improvement in fibrosis without a worsening of NASH. This primary endpoint was actually the secondary endpoint of the CENTAUR study. When you look at the CVC arm in comparison to the control arm 20% of patients versus 10% of patients in the control met the secondary endpoint. Allergan expects to have a comparison in year two showing that the difference between the control and CVC arm didn't get worse. The safety profile of the drug was good with the most common adverse events being fatigue (2.8%) and diarrhea (2.4%). These adverse events were similar in the CVC and the placebo treatment arms. The incidence of these adverse events was similar to earlier conducted studies.

The pathway to approval for this drug is uphill based on its melancholy efficacy. They are hoping to show a 10% benefit over placebo. As with Intercept the FDA was very accommodating right now but if a drug is approved in this indication things just got a lot harder for CVC. Keep in mind that this drug didn't work on 80% of the patients. These patients didn't receive any mortality benefit from a reduction in their fibrosis. Furthermore there is a decent chance that the F2 patients are excluded from the data set the FDA will ultimately consider the mortality benefit. Allergan seems to be satisfied with the goal of maintenance of fibrosis but referring back to the Endpoints chart they simply don't have an approvable endpoint. For those readers that like pictures look where Allergan ranked. It seems like the ranking of the pictures and the human trial results are similar.


Genfit's drug Elafibranor takes advantage of the dual agonist PPAR-alpha and delta receptors. PPAR-alpha is highly expressed in the liver and controls the genes involved in lipid and lipid protein metabolism. This target is the likely reason why there was a favorable impact noted in the phase 2a trial where the good cholesterol HDL went up and the bad cholesterol LDL came down about 10%. PPAR - delta is widely expressed and play a major role in fatty acid oxidation and insulin sensitivity. As noted earlier in the article insulin sensitivity is a big factor in disease progression. GF-505 through its PPAR agonists decreases liver enzymes like ALT 20.5 % resulting in an anti-inflammatory response and reduces insulin sensitivity. It is worthy to mention that GF-505 doesn't target the PPAR-gamma which is associated with the side effects of weight gain and fluid retention.

In the GOLDEN-505 phase 2b clinical trial the primary endpoint was the reversal of NASH without worsening fibrosis. They dosed 274 patients in a 52 weeks study with 3 arms of 80mg/day and 120 mg/day. The results showed at the highest dose increased resolution of NASH by 19% versus 12% in the placebo. Genfit attributed the failure to an "unexpected rate of resolution of NASH patients randomized to placebo." The inclusion criteria was very vague allowing any grade of inflammation. The trial design had no focus on any particular stage of the disease and that is a mistake because diet and exercise are known to reverse the early stage of the disease. This methodology just wasn't going to fly with the FDA so clarification on what constitutes NASH resolution was given. In a subgroup of patients with a NAS>4 and under the revised definition of NASH resolution the results were 19% vs 9% for placebo. This was hardly a silver lining because even the fibrosis scores were reduced only .65 versus an increase of .10 in non-responders. If you are a pictures person then revisit the rat slides and you will see how the before picture really doesn't look that bad and then the after picture looks better but not dramatically different. This is just more evidence on how the mouse studies correlate to human trials.

Based on their phase 2b study they are pursuing a pivotal phase 3 study with an endpoint of NASH resolution without a worsening of fibrosis. It's important to point out that FDA didn't make a more stringent endpoint they merely defined it. It is arguable that in Genfit's case the FDA is bending over backwards to help these drugs get approved and let them cut their 2000 patient study in half. NASH resolution will be measured in 1000 patients after 72 weeks. The big pitfall that still remains in this study is the endpoint. The FDA will certainly consider the results of NASH resolution but will they rule in favor of registration when they have clearly defined that NASH resolution is an unreliable endpoint as indicated in the Endpoints chart.

They have started their phase 3 trial RESOLVE-IT almost 1 year ago and planning to enroll 1000 patients by Q1-2107 which would put top line results 72 weeks later and hit in the second half of 2019. With €152mil cash at the end of 2016 funding is in place to meet their phase 3 milestones in 2019. Elafibranor is targeting NASH patients with stage 2-3 fibrosis. They do have a solid safety profile and have an interesting biomarker program developing because liver biopsies needed to prove NASH could really dampen the growth of the mainstream market.

The pipeline in this indication doesn't stop at NASH with fibrosis. The company also plans to go after Pediatric NASH, and primary biliary cholangitis (PBC). The move to go into PBC is very calculated since ICPT has a foothold on that indication but the pruritus side effect is a real barrier and they are looking to capitalize on the opportunity.


Conatus has one of the honorable mention drugs because they appear to have the right trial design, the correct target of liver cirrhosis and have safety. They are partnered with Novartis (NYSE:NVS) but have the ability to go after multiple indications targeting the liver. They recently received $50 mil in an upfront payment and are sharing the costs of the trial so funding is in place to meet their endpoints. Their drug Emricasan is a caspase protese inhibitor that the interrupts the progression of liver disease by reducing the enzymes in the liver that signal the cells to die. If this drug receives approval there are quite a few indications in the liver that they could go after because reducing cell death is more of a universal target that protects the liver. The liver has a great ability to regenerate itself so the idea is really simple in that if you slow the rate of cell death that puts less stress on the liver allowing the healing process to take place. Try this analogy of a boat in a rainstorm. The boat represents liver function, the bilge represents the liver's ability to regenerate, the rain represents the inflammatory environment, and your bail bucket is the drug that prevents cells from dying. As it rains you hope your bail bucket and bilge can keep up with the amount of rain and keep you afloat. The only problem is that if it rains too hard you can't keep up and the boat will be swamped. So it's not a perfect solution but worthy of trying. They have 4 trials so it's easier to show this slide while we focus on the trial for NASH.

Source: Conatus Programs

Their ENCORE-PH is targeting very sick patients with compensated or early decompensated NASH cirrhosis and severe portal hypertension (baseline HVPG>12 mmHg). Their endpoint is the reduction of fibrosis and HVPG, a validated endpoint by the FDA. In preclinical trials the Hepatic vascular resistance (HVR) was down 14% from the cirrhotic rats. In the phase 2a trial HVPG was decreased 17.2% in the group with HVPG > 12 mmHg and decreased 10.1% in the group HVPG > 10 mmHg. It's important to point out that the preclinical data tracks the human data even though it's not an apples to apples comparison. The biggest disappointments with the study were that the overall change in HVPG was not significant and the cCK18 levels didn't really change in the baseline group HVPG> 12 mmHg. When looking forward to results of the phase 2b trial in 2018 it seems like they might have a very good chance of lowering HVPG in this patient population. The phase 2a trial was 25 mg and only 28 days but the phase 2b is 6 months and has a 25mg and 50 mg cohort. More drug and more healing time might be just what is needed to address the underlying liver disease. This is definitely one to put on the watch list and have another look at the cirrhotic rat pictures.

Galectin Therapeutics

The clear front runner in NASH is GALT, and the reason is simple. At the risk of sounding like our president, don't let mainstream media cloud the fact that they have a pivotal phase 2b trial with topline data to be released around December 2017, about a year ahead of any of the 26 competitors listed in this article. A pivotal trial is a trial designed to get statistically significant evidence of efficacy and safety required for registration. Phase 3 trials are all assumed to be pivotal so the term is reserved for rare pivotal phase II trials. An example of a rare successful pivotal phase II trial is the clinical trial of Venetoclax by Roche (OTCQX:RHHBY) in the investigation of Hard to treat Chronic Lymphocytic Leukemia. They met their endpoints on Aug 12, 2015 and the FDA approve registration on April 11, 2016. Marketing of the drug was about 8 months after the pivotal trial results. The company could follow this model if the data comes in positive.

Most drugs don't get approved for safety reasons. This drug has one of the best safety profiles with no SAE related to the drug in over 3000 doses. One of the primary reasons for this incredibly safe profile is due to the composition of the molecule. When metabolized it can only be broken down into Carbon dioxide and Water. Right now the study is powered at 95% and with current enrollment at 162 only five have dropped out. This high power could suggest very robust results are forthcoming. All the elements seem to be in place for an approval because the surrogate markers of HVPG and reversal of fibrosis are at the top of the FDA's radar. The environment of the FDA seems extremely accommodating when you look at the treatment of ICPT, AGN, GNFT and CNAT all getting favorable changes to their endpoints. The reason to bring this up is because the trial results in December aren't necessarily a binary event. Approval is always the goal, but this is a very high powered study and there may be ways to present the data to the FDA to make the case for approval because safety is a non-issue. Even the slightest bit of clinical benefit in these late stage patients like the reduction of psoriasis could lead to an approval.

There definitely appears to be a direct linkage between psoriasis and NASH. A study done at the Brooks Army Medical Center in 2015 evaluated 129 patients diagnosed with psoriasis or psoriatic arthritis and found that 47% had NAFLD and 22% had NASH. An Italian prospective study put the number at 59% of psoriasis patients had NAFLD. These are staggering statistics that shows the linkage between NASH and psoriasis. Although there was no apparent improvement in the three non-invasive tests for assessment of liver fibrosis in the four-month NASH-FX study, Dr. Stephen Harrison, a leading investigator in NASH and liver disease and the principal investigator of the NASH-FX study has pointed out that the inhibition of galectin-3 with GR-MD-02 remains promising for the treatment of NASH fibrosis. Dr. Harrison was especially encouraged that GR-MD-02 has demonstrated an improved clinical effect in moderate-to-severe psoriasis, suggesting the compound has activity in a human disease that can occur in association with NASH. Assuming a certain percentage of the patients in this study have psoriasis and the investigators documented it. That would give the company more patients to make a case for the indication of psoriasis.

While awaiting the results of GALT's phase 2b trial, the Data Safety Monitoring Board (DSMB) has chimed in at the midpoint of the trial that GR-MD-02 has had no safety issues and is well tolerated. In layman's terms that means it's safe. This phase 2b trial has enrolled 162 patients and is a multicenter, randomized, double-blind, 3 arm study of patients with compensated cirrhosis caused by NASH with portal hypertension (HVPG>6 mmHg). This is quite a mouthful but what it means is that the trial is well designed to show efficacy. Infusions of 2 mg/kg and 8 mg/kg are given bi-weekly for a year. The primary endpoint is reduction in portal pressure as a surrogate for a reduction in fibrosis. The phase 2b data is highly anticipated as there were favorable results in the phase 1 study where inflammatory biomarkers like IL-6 were down 16% and TNF-alpha was down 16%. It cannot be emphasized enough that the real focus for optimism should be on the rat cirrhosis studies because they were designed to fail and didn't. Emphasis should be placed on the before and after pictures.

All four of the other leaders in NASH have been given very favorable treatment by the FDA. The FDA has essentially tipped their hand that they are going to be very accommodative in approving a drug. The only company not yet the recipient of their generosity is GALT in part because they haven't needed it. Assuming GALT misses its endpoint, and breaks the strong correlation shown between animal and human efficacy it's completely realistic that they would get a pass just like the others. The Trump administration is in favor of approving safe drugs that work. If they did miss their endpoint it would likely be dose related not safety related, which is why they conducted multiple arms. The amazing before and after psoriasis pictures show that not enough dosing could be an issue, but the bar is set so much higher for psoriasis than it is for NASH that this risk should be a non-issue. Billionaire investor Dick Uihlein has come to the aid of the company multiple times and it seems evident that he wants to see this through. The latest injection of funds takes the company through top line results in 2017. His investment has taken the downside risk of investing in the company for fear they won't complete the trial. Investors have been conditioned to put so much emphasis on the FDA trial results but with endpoints coming once a year it's hard to make a decision. The good news is that a picture is worth a thousand words.

Source: Author compilation

Disconnect in Evaluating NASH

Wall Street has improperly evaluated the top ranking companies in NASH. Mainstream media simply has it wrong because very few have taken the time to research the true value of galectin inhibition. The Financial Times came out with an article "Big pharma bets billion on 'silent' liver disease" and didn't even mention the true leader in the space. You have stock analysts like Roth Capital with price targets of $.75 on Galectin Therapeutics when the stock is trading more than double. Merck (NYSE:MRK) and GIL with their acquisition of Galtecto certainly understand how vital galectins are in the future of biotech. It's unexplainable why others in the mainstream can't grasp the potential of the technology. Add to the confusion the massive buyouts like the $1.7 billion takeover of Tobira for a drug that at best would maintain NASH. ICPT, the anointed leader, has safety problems and their indication for PBC is under assault for the pruritus side effects, not to mention continued registration is based on them proving efficacy. Allergan looks like they are settling in for the long haul as a maintenance type drug targeting the population of NASH that doesn't have side effects. GNFTF with their dual PPAR agonist leads you to believe they are attacking multiple facets of the disease when in reality they are focused on the metabolism and that is not going to help the sickest of patients. The battle to defeat NASH is only going to be won by fighting it in the final stage of disease where cirrhosis has set in. This is where CNAT has the right idea because they are targeting the sickest of patients and have shown some benefit but they are just starting on the Phase 2b trial.

The true leader in NASH is a drug that can work on multiple fronts of the disease. Since the disease is progressive in nature it needs to work in reverse order. The focus should be fibrosis, followed by inflammation, then reduction of the ballooning, and finally the excess fat. In the section above labeled other novel targets it should be highlighted that most of these drugs are going after excess fat, the least important pillar of NASH. The drug needs to be approvable by the FDA which means adhering to their guideline of acceptable endpoints such as a reduction in HVPG and fibrosis. The drug needs to be safe yet cost effective compared to a liver transplant.

The drug should likely target the galectin-3 receptor which has been proven in animal studies by many peer reviewed articles starting over a decade ago as the cause of fibrosis. The galectin-3 is over expressed in liver, heart, lung, and kidney fibrosis regardless of the cause. That means in theory if a galectin blocker can reverse fibrosis in NASH, it could reverse it in hepatitis C, alcoholic liver disease (ALD), kidney disease, heart failure, and more. The simple truth is that galectins are responsible for most of the chronic diseases in our body among them are cancer, organ fibrosis, atopic dermatitis, plaque psoriasis, vitiligo, arthritis, and even fat cells. The leadership in NASH has changed; here are the revised leaders based on timing until registration.


Company (Ticker)

Market Cap 3/4/17


Galectin Therapeutics

$54.75 mil


Intercept Pharmaceuticals

$3.15 bill



$933.4 mil



$82.3 bill



$119.6 mil

Disclosure: I am/we are long GALT, CNAT.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.